EX-99.1 2 orgo-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

img36819578_0.jpg

 

FOR IMMEDIATE RELEASE

 

Organogenesis Holdings Inc. Reports Second Quarter 2024 Financial Results

 

CANTON, Mass., (August 8, 2024) -- Organogenesis Holdings Inc. (Nasdaq: ORGO), a leading regenerative medicine company focused on the development, manufacture, and commercialization of product solutions for the Advanced Wound Care and Surgical & Sports Medicine markets, today reported financial results for the second quarter ended June 30, 2024.

 

Second Quarter 2024 Financial Results Summary:

 

•
Net revenue of $130.2 million for the second quarter of 2024, an increase of $12.9 million compared to net revenue of $117.3 million for the second quarter of 2023. Net revenue for the second quarter of 2024 consists of:
o
Net revenue from Advanced Wound Care products of $123.2 million, an increase of 12% from the second quarter of 2023.
o
Net revenue from Surgical & Sports Medicine products of $7.0 million, a decrease of 3% from the second quarter of 2023.
•
Net loss of $17.0 million for the second quarter of 2024, compared to net income of $5.3 million for the second quarter of 2023, a decrease in net income of $22.4 million.
•
Adjusted net income1 of $0.2 million for the second quarter of 2024, compared to adjusted net income of $6.1 million for the second quarter of 2023, a decrease in adjusted net income of $5.9 million.
•
Adjusted EBITDA of $15.6 million for the second quarter of 2024, compared to Adjusted EBITDA of $15.4 million for the second quarter of 2023, an increase of $0.2 million.

 

“Our progress in the second quarter reflects strong execution and validation of our strategy to expand customer relationships by emphasizing the value of our differentiated products,” said Gary S. Gillheeney, Sr., President and Chief Executive Officer of Organogenesis.

 

Mr. Gillheeney, Sr. continued: “We continue building momentum in a challenging operating environment while achieving major clinical milestones and advancing the ReNu development program. Although we expect near-term variability in the skin substitutes market, we are extremely pleased with our progress in the first half of the year and are confident in our ability to navigate that complexity while working to expand our extensive body of clinical evidence supporting meaningful solutions that improve patients’ lives.”

 


 

 

1Defined as GAAP net loss adjusted to exclude the effect of amortization, restructuring charges, write-down of capitalized software costs, and impairment of building and improvements, and the resulting income taxes on these items.

 

Second Quarter 2024 Financial Results:



 

 

Three Months Ended June 30,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

 

(in thousands, except for percentages)

 

Advanced Wound Care

 

$

123,237

 

 

$

110,075

 

 

$

13,162

 

 

 

12

%

Surgical & Sports Medicine

 

 

6,997

 

 

 

7,241

 

 

 

(244

)

 

 

(3

%)

Net revenue

 

$

130,234

 

 

$

117,316

 

 

$

12,918

 

 

 

11

%

 

 

 

Six Months Ended June 30,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

 

(in thousands, except for percentages)

 

Advanced Wound Care

 

$

227,101

 

 

$

210,992

 

 

$

16,109

 

 

 

8

%

Surgical & Sports Medicine

 

 

13,109

 

 

 

13,966

 

 

 

(857

)

 

 

(6

%)

Net revenue

 

$

240,210

 

 

$

224,958

 

 

$

15,252

 

 

 

7

%

 

Net revenue for the second quarter of 2024 was $130.2 million, compared to $117.3 million for the second quarter of 2023, an increase of $12.9 million, or 11%. The increase in net revenue was driven by an increase of $13.2 million, or 12%, in net revenue for Advanced Wound Care products partially offset by a decrease of $0.2 million, or 3%, in net revenue for Surgical & Sports Medicine products.

 

Gross profit for the second quarter of 2024 was $101.0 million, or 78% of net revenue, compared to $91.0 million, or 78% of net revenue for the second quarter of 2023, an increase of $10.0 million, or 11%.

 

Operating expenses for the second quarter of 2024 were $114.9 million compared to $81.3 million for the second quarter of 2023, an increase of $33.7 million, or 41%. R&D expense was $15.6 million for the second quarter of 2024, compared to $10.9 million for the second quarter of 2023, an increase of $4.6 million, or 42%. Selling, general and administrative expenses were $76.5 million for the second quarter of 2024, compared to $70.3 million for the second quarter of 2023, an increase of $6.2 million, or 9%. For the three months ended June 30, 2024, the Company recorded impairment and write down expenses of $18.8 million and $4.0 million, respectively.

 

Operating loss for the second quarter of 2024 was $13.9 million, compared to operating income of $9.7 million for the second quarter of 2023, a decrease in operating income of $23.6 million, or 243%.

 

Total other expense, net, for the second quarter of 2024 was $0.6 million, relatively consistent with $0.6 million for the second quarter of 2023.

 

Net loss for the second quarter of 2024 was $17.0 million, or $(0.13) per share, compared to net income of $5.3 million, or $0.04 per share, for the second quarter of 2023, a decrease in net income of $22.4 million, or $(0.17) per share.

 

Adjusted net income of $0.2 million for the second quarter of 2024, compared to $6.1 million for the second quarter of 2023, a decrease of $5.9 million, or 97%.

 

Adjusted EBITDA was $15.6 million for the second quarter of 2024, compared to $15.4 million for the second quarter of 2023, an increase of $0.2 million, or 1%.

 

 

 

As of June 30, 2024, the Company had $90.5 million in cash, cash equivalents and restricted cash and $63.5 million in debt obligations, compared to $104.3 million in cash, cash equivalents and restricted cash and $66.2 million in debt obligations as of December 31, 2023.

First Half 2024 Financial Results:

 

 

Six Months Ended June 30,

 

 

Change

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

 

(in thousands, except for percentages)

 

Advanced Wound Care

 

$

227,101

 

 

$

210,992

 

 

$

16,109

 

 

 

8

%

Surgical & Sports Medicine

 

 

13,109

 

 

 

13,966

 

 

 

(857

)

 

 

(6

%)

Net revenue

 

$

240,210

 

 

$

224,958

 

 

$

15,252

 

 

 

7

%

 

Net revenue for the six months ended June 30, 2024 was $240.2 million, compared to $225.0 million for the six months ended June 30, 2023, an increase of $15.3 million, or 7%. The increase in net revenue was driven by an increase of $16.1 million, or 8%, in net revenue for Advanced Wound Care products partially offset by a decrease of $0.9 million, or 6%, in net revenue for Surgical & Sports Medicine products.

 

Gross profit for the six months ended June 30, 2024 was $182.3 million, or 76% of net revenue, compared to $172.0 million, or 76% of net revenue for six months ended June 30, 2023, an increase of $10.3 million, or 6%.

 

Operating expenses for the six months ended June 30, 2024 were $200.1 million compared to $166.3 million for the six months ended June 30, 2023, an increase of $33.8 million or 20%. R&D expense was $28.4 million for the six months ended June 30, 2024, compared to $22.1 million for the six months ended June 30, 2023, an increase of $6.3 million, or 29%. Selling, general and administrative expenses were $148.9 million for the six months ended June 30, 2024, compared to $144.2 million for the six months ended June 30, 2023, an increase of $4.7 million, or 3%. For the six months ended June 30, 2024, the Company recorded impairment and write down expenses of $18.8 million and $4.0 million, respectively.

 

Operating loss for the six months ended June 30, 2024 was $17.7 million, compared to operating income of $5.7 million for the six months ended June 30, 2023, a decrease in operating income of $23.5 million, or 409%.

 

Total other expense, net, for the six months ended June 30, 2024 was $1.1 million compared to $1.2 million for the six months ended June 30, 2023, a decrease in other expense, net of $0.1 million, or 8%.

 

Net loss for the six months ended June 30, 2024 was $19.1 million, or $(0.14) per share, compared to net income of $2.3 million or $0.02 per share, for the six months ended June 30, 2023, a decrease in net income of $21.5 million, or $(0.16) per share.

 

Adjusted net loss of $1.2 million for the six months ended June 30, 2024, compared to adjusted net income of $5.4 million for the six months ended June 30, 2023, a decrease in adjusted net income of $6.7 million, or 124%.

 

Adjusted EBITDA was $18.2 million for the six months ended June 30, 2024, compared to $19.2 million for the six months ended June 30, 2023, a decrease of $1.0 million, or 5%.

 

As of June 30, 2024, the Company had $90.5 million in cash, cash equivalents and restricted cash and $63.5 million in debt obligations, compared to $104.3 million in cash, cash equivalents and restricted cash and $66.2 million in debt obligations as of December 31, 2023.

Fiscal Year 2024 Guidance:

 

 

 

For the year ending December 31, 2024 the Company is reaffirming its prior revenue guidance and updating its profitability guidance and expects:

•
Net revenue between $445.0 million and $470.0 million, representing an increase of approximately 3% to 9% year-over-year, as compared to net revenue of $433.1 million for the year ended December 31, 2023.
o
The 2024 net revenue guidance range assumes:
▪
Net revenue from Advanced Wound Care products between $415.0 million and $435.0 million, an increase of 2% to 7% year-over-year as compared to net revenue of $405.5 million for the year ended December 31, 2023.
▪
Net revenue from Surgical & Sports Medicine products between $30.0 million and $35.0 million, an increase of 9% to 27% year-over-year as compared to net revenue of $27.6 million for the year ended December 31, 2023.
•
Net loss between $(27.0) million and $(12.0) million and adjusted net income (loss) between $(8.0) million and $7.0 million.
•
EBITDA between $(17.0) million and $2.0 million and Adjusted EBITDA between $16.0 million and $35.0 million.

 

Second Quarter Earnings Conference Call:

 

Management will host a conference call at 5:00 p.m. Eastern Time on August 8th to discuss the results of the quarter, and provide a corporate update with a question and answer session. Those who would like to participate may access the live webcast by visiting www.investors.organogenesis.com or by calling (800) 715-9871 and providing access code 6679912. The live webcast can also be accessed via the company's website at investors.organogenesis.com. The webcast will be archived on the company website for approximately one year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ORGANOGENESIS HOLDINGS INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share and per share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

89,902

 

 

$

103,840

 

Restricted cash

 

 

575

 

 

 

498

 

Accounts receivable, net

 

 

105,945

 

 

 

81,999

 

Inventories, net

 

 

26,883

 

 

 

28,253

 

Prepaid expenses and other current assets

 

 

10,889

 

 

 

10,454

 

Total current assets

 

 

234,194

 

 

 

225,044

 

Property and equipment, net

 

 

89,947

 

 

 

116,228

 

Intangible assets, net

 

 

14,136

 

 

 

15,871

 

Goodwill

 

 

28,772

 

 

 

28,772

 

Operating lease right-of-use assets, net

 

 

36,572

 

 

 

40,118

 

Deferred tax asset, net

 

 

33,691

 

 

 

28,002

 

Other assets

 

 

5,851

 

 

 

5,990

 

Total assets

 

$

443,163

 

 

$

460,025

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of term loan

 

$

5,758

 

 

$

5,486

 

Current portion of finance lease obligations

 

 

1,125

 

 

 

1,081

 

Current portion of operating lease obligations - related party

 

 

7,357

 

 

 

8,413

 

Current portion of operating lease obligations

 

 

4,081

 

 

 

4,731

 

Accounts payable

 

 

29,390

 

 

 

30,724

 

Accrued expenses and other current liabilities

 

 

38,016

 

 

 

30,074

 

Total current liabilities

 

 

85,727

 

 

 

80,509

 

Term loan, net of current portion

 

 

57,731

 

 

 

60,745

 

Finance lease obligations, net of current portion

 

 

1,314

 

 

 

1,888

 

Operating lease obligations, net of current portion - related party

 

 

10,139

 

 

 

11,954

 

Operating lease obligations, net of current portion

 

 

23,483

 

 

 

25,053

 

Other liabilities

 

 

1,268

 

 

 

1,213

 

Total liabilities

 

 

179,662

 

 

 

181,362

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued

 

 

—

 

 

 

—

 

Common stock, $0.0001 par value; 400,000,000 shares authorized; 133,302,786 and 132,044,944 shares issued; 132,574,238 and 131,316,396 shares outstanding at June 30, 2024 and December 31, 2023, respectively

 

 

13

 

 

 

13

 

Additional paid-in capital

 

 

323,602

 

 

 

319,621

 

Accumulated deficit

 

 

(60,114

)

 

 

(40,971

)

Total stockholders’ equity

 

 

263,501

 

 

 

278,663

 

Total liabilities and stockholders’ equity

 

$

443,163

 

 

$

460,025

 

 

 

 

ORGANOGENESIS HOLDINGS INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(amounts in thousands, except share and per share data)

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net revenue

 

$

130,234

 

 

$

117,316

 

 

$

240,210

 

 

$

224,958

 

Cost of goods sold

 

 

29,198

 

 

 

26,316

 

 

 

57,894

 

 

 

52,923

 

Gross profit

 

 

101,036

 

 

 

91,000

 

 

 

182,316

 

 

 

172,035

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

76,540

 

 

 

70,317

 

 

 

148,862

 

 

 

144,151

 

Research and development

 

 

15,587

 

 

 

10,938

 

 

 

28,397

 

 

 

22,140

 

Impairment of property and construction

 

 

18,842

 

 

 

—

 

 

 

18,842

 

 

 

—

 

Write down of capitalized internal-use software costs

 

 

3,959

 

 

 

—

 

 

 

3,959

 

 

 

—

 

Total operating expenses

 

 

114,928

 

 

 

81,255

 

 

 

200,060

 

 

 

166,291

 

Income (loss) from operations

 

 

(13,892

)

 

 

9,745

 

 

 

(17,744

)

 

 

5,744

 

Other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(620

)

 

 

(594

)

 

 

(1,134

)

 

 

(1,243

)

Other income (expense), net

 

 

(28

)

 

 

28

 

 

 

(5

)

 

 

51

 

Total other expense, net

 

 

(648

)

 

 

(566

)

 

 

(1,139

)

 

 

(1,192

)

Net income (loss) before income taxes

 

 

(14,540

)

 

 

9,179

 

 

 

(18,883

)

 

 

4,552

 

Income tax expense

 

 

(2,503

)

 

 

(3,863

)

 

 

(260

)

 

 

(2,205

)

Net income (loss) and comprehensive income (loss)

 

$

(17,043

)

 

$

5,316

 

 

$

(19,143

)

 

$

2,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.13

)

 

$

0.04

 

 

$

(0.14

)

 

$

0.02

 

Diluted

 

$

(0.13

)

 

$

0.04

 

 

$

(0.14

)

 

$

0.02

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

132,573,153

 

 

 

131,293,398

 

 

 

132,217,463

 

 

 

131,189,405

 

Diluted

 

 

132,573,153

 

 

 

133,066,010

 

 

 

132,217,463

 

 

 

132,475,908

 

 

 

 

ORGANOGENESIS HOLDINGS INC. UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

(amounts in thousands, except share and per share data)

 

 

 

 

Six Months Ended
June 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

(19,143

)

 

$

2,347

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

6,438

 

 

 

4,922

 

Amortization of intangible assets

 

 

1,735

 

 

 

2,459

 

Reduction in the carrying value of right-of-use assets

 

 

4,364

 

 

 

3,893

 

Non-cash interest expense

 

 

209

 

 

 

215

 

Deferred interest expense

 

 

213

 

 

 

245

 

Provision recorded for credit losses

 

 

2,032

 

 

 

190

 

Deferred tax benefit

 

 

(5,689

)

 

 

—

 

Loss on disposal of property and equipment

 

 

434

 

 

 

65

 

Adjustment for excess and obsolete inventories

 

 

4,469

 

 

 

3,464

 

Stock-based compensation

 

 

4,975

 

 

 

4,213

 

Impairment of property and construction (Note 6)

 

 

18,842

 

 

 

—

 

Write down of capitalized internal-use software costs (Note 6)

 

 

3,959

 

 

 

—

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(25,978

)

 

 

(4,970

)

Inventories

 

 

(2,009

)

 

 

(4,045

)

Prepaid expenses and other current assets and other assets

 

 

(436

)

 

 

(2,874

)

Operating leases

 

 

(5,908

)

 

 

(4,178

)

Accounts payable

 

 

(2,147

)

 

 

(3,535

)

Accrued expenses and other current liabilities

 

 

8,162

 

 

 

1,091

 

Other liabilities

 

 

54

 

 

 

67

 

Net cash provided by (used in) operating activities

 

 

(5,424

)

 

 

3,569

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(4,102

)

 

 

(15,061

)

Net cash used in investing activities

 

 

(4,102

)

 

 

(15,061

)

Cash flows from financing activities:

 

 

 

 

 

 

Payments of term loan under the 2021 Credit Agreement

 

 

(2,813

)

 

 

(1,875

)

Payments of withholding taxes in connection with RSUs vesting

 

 

(1,174

)

 

 

(332

)

Proceeds from the exercise of stock options

 

 

180

 

 

 

—

 

Principal repayments of finance lease obligations

 

 

(528

)

 

 

(83

)

Net cash used in financing activities

 

 

(4,335

)

 

 

(2,290

)

Change in cash, cash equivalents and restricted cash

 

 

(13,861

)

 

 

(13,782

)

Cash, cash equivalents, and restricted cash, beginning of period

 

 

104,338

 

 

 

103,290

 

Cash, cash equivalents, and restricted cash, end of period

 

$

90,477

 

 

$

89,508

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

2,744

 

 

$

2,608

 

Cash paid for income taxes

 

$

4,796

 

 

$

3,022

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Cumulative effect adjustment for adoption of ASU No. 2016-13

 

$

—

 

 

$

615

 

Purchases of property and equipment included in accounts payable and accrued expenses

 

$

709

 

 

$

1,882

 

Right-of-use assets obtained through operating lease obligations

 

$

817

 

 

$

4,253

 

 

 

 

 

Non-GAAP Financial Measures

Our management uses financial measures that are not in accordance with generally accepted accounting principles in the United States, or GAAP, in addition to financial measures in accordance with GAAP to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Our management uses Adjusted EBITDA, adjusted net income (loss), and non-GAAP operating income to evaluate our operating performance and trends and make planning decisions. Our management believes Adjusted EBITDA, adjusted net income (loss), and non-GAAP operating income help identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude. Accordingly, we believe that Adjusted EBITDA, adjusted net income (loss), and non-GAAP operating income provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.

The following table presents a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP Adjusted EBITDA, for the periods presented:

`

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

(Unaudited, in thousands)

 

Net income (loss)

 

$

(17,043

)

 

$

5,316

 

 

$

(19,143

)

 

$

2,347

 

Interest expense, net

 

 

620

 

 

 

594

 

 

 

1,134

 

 

 

1,243

 

Income tax expense

 

 

2,503

 

 

 

3,863

 

 

 

260

 

 

 

2,205

 

Depreciation and amortization

 

 

3,366

 

 

 

2,228

 

 

 

6,438

 

 

 

4,922

 

Amortization of intangible assets

 

 

834

 

 

 

1,229

 

 

 

1,735

 

 

 

2,459

 

EBITDA

 

 

(9,720

)

 

 

13,230

 

 

 

(9,576

)

 

 

13,176

 

Stock-based compensation expense

 

 

2,568

 

 

 

2,299

 

 

 

4,975

 

 

 

4,213

 

Restructuring charge (1)

 

 

—

 

 

 

(126

)

 

 

—

 

 

 

1,782

 

Impairment of building and improvements (2)

 

 

18,842

 

 

 

—

 

 

 

18,842

 

 

 

—

 

Write-down of capitalized software costs (3)

 

 

3,959

 

 

 

—

 

 

 

3,959

 

 

 

—

 

Adjusted EBITDA

 

$

15,649

 

 

$

15,403

 

 

$

18,200

 

 

$

19,171

 

(1) Amount reflects employee severance, retention and benefits as well as other exit costs associated with the Company’s restructuring activities.

(2) Amount reflects the impairment of a purchased building and associated unfinished construction work.

(3) Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.

The following table presents a reconciliation of GAAP net income (loss) to non-GAAP adjusted net income (loss), for the periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

(Unaudited, in thousands)

 

Net income (loss)

 

$

(17,043

)

 

$

5,316

 

 

$

(19,143

)

 

$

2,347

 

Amortization

 

 

834

 

 

 

1,229

 

 

 

1,735

 

 

 

2,459

 

Restructuring charge (1)

 

 

—

 

 

 

(126

)

 

 

—

 

 

 

1,782

 

Impairment of building and improvements (2)

 

 

18,842

 

 

 

—

 

 

 

18,842

 

 

 

—

 

Write-down of capitalized software costs (3)

 

 

3,959

 

 

 

—

 

 

 

3,959

 

 

 

—

 

Tax on above

 

 

(6,381

)

 

 

(298

)

 

 

(6,625

)

 

 

(1,145

)

Adjusted net income (loss)

 

$

211

 

 

$

6,121

 

 

$

(1,232

)

 

$

5,443

 

(1) Amount reflects employee severance, retention and benefits as well as other exit costs associated with the Company’s restructuring activities.

(2) Amount reflects the impairment of a purchased building and associated unfinished construction work.

(3) Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.

 

 

The following table presents a reconciliation of GAAP income (loss) from operations to non-GAAP operating income, for the periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

(Unaudited, in thousands)

 

Income (loss) from operations

 

$

(13,892

)

 

$

9,745

 

 

$

(17,744

)

 

$

5,744

 

Amortization of intangible assets

 

 

834

 

 

 

1,229

 

 

 

1,735

 

 

 

2,459

 

Restructuring charge (1)

 

 

—

 

 

 

(126

)

 

 

—

 

 

 

1,782

 

Impairment of building and improvements (2)

 

 

18,842

 

 

 

—

 

 

 

18,842

 

 

 

—

 

Write-down of capitalized software costs (3)

 

 

3,959

 

 

 

—

 

 

 

3,959

 

 

 

—

 

Non-GAAP operating income

 

$

9,743

 

 

$

10,848

 

 

$

6,792

 

 

$

9,985

 

(1) Amount reflects employee severance, retention and benefits as well as other exit costs associated with the Company’s restructuring activities.

(2) Amount reflects the impairment of a purchased building and associated unfinished construction work.

(3) Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.

The following table presents a reconciliation of projected GAAP net income (loss) to projected non-GAAP EBITDA and projected non-GAAP Adjusted EBITDA included in our guidance for the year ending December 31, 2024:

 

 

 

Year Ended December 31,

 

 

 

2024L

 

 

2024H

 

Net loss

 

$

(27,000

)

 

$

(12,000

)

Interest expense, net

 

 

3,000

 

 

 

2,000

 

Income tax expense

 

 

(6,000

)

 

 

(1,000

)

Depreciation and amortization

 

 

10,000

 

 

 

10,000

 

Amortization of intangible assets

 

 

3,000

 

 

 

3,000

 

EBITDA

 

$

(17,000

)

 

$

2,000

 

Stock-based compensation expense

 

 

10,000

 

 

 

10,000

 

Impairment of building and improvements

 

 

19,000

 

 

 

19,000

 

Write-down of capitalized software costs

 

 

4,000

 

 

 

4,000

 

Adjusted EBITDA

 

$

16,000

 

 

$

35,000

 

 

The following table presents a reconciliation of projected GAAP net loss to projected non-GAAP adjusted net income (loss) included in our guidance for the year ending December 31, 2024:

 

 

 

Year Ending December 31,

 

 

 

 

2024L

 

 

2024H

 

 

Net loss

 

$

(27,000

)

 

$

(12,000

)

 

Amortization of intangible assets

 

 

3,000

 

 

 

3,000

 

 

Impairment of building and improvements

 

 

19,000

 

 

 

19,000

 

 

Write-down of capitalized software costs

 

 

4,000

 

 

 

4,000

 

 

Tax on above

 

 

(7,000

)

 

 

(7,000

)

 

Adjusted net income (loss)

 

$

(8,000

)

 

$

7,000

 

 

 

 

 

Forward-Looking Statements

 

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts of future events. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include statements relating to the Company’s expected revenue, net income (loss), adjusted net income (loss), EBITDA, and Adjusted EBITDA for fiscal 2024 and the breakdown of expected revenue in both its Advanced Wound Care and Surgical & Sports Medicine categories. Forward-looking statements with respect to the operations of the Company, strategies, prospects, and other aspects of the business of the Company are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking statements. These factors include, but are not limited to: (1) the impact of any changes to the coverage and reimbursement levels for the Company’s products (including as a result of the recently proposed LCDs); (2) the Company faces significant and continuing competition, which could adversely affect its business, results of operations and financial condition; (3) rapid technological change could cause the Company’s products to become obsolete and if the Company does not enhance its product offerings through its research and development efforts, it may be unable to effectively compete; (4) to be commercially successful, the Company must convince physicians that its products are safe and effective alternatives to existing treatments and that its products should be used in their procedures; (5) the Company’s ability to raise funds to expand its business; (6) the Company has incurred losses in the current period and prior periods and may incur losses in the future; (7) changes in applicable laws or regulations; (8) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (9) the Company’s ability to maintain production or obtain supply of its products in sufficient quantities to meet demand; (10) any resurgence of the COVID-19 pandemic and its impact, if any, on the Company’s fiscal condition and results of operations; (11) the impact of the suspension of commercialization of: (a) ReNu and NuCel in connection with the expiration of the FDA’s enforcement grace period for HCT/Ps on May 31, 2021 and (b) Dermagraft in the second quarter of 2022 pending transition of manufacturing to a new manufacturing facility or a third-party manufacturer; (12) whether the Company is able to obtain regulatory approval for and successfully commercialize ReNu; and (13) other risks and uncertainties described in the Company’s filings with the Securities and Exchange Commission, including Item 1A (Risk Factors) of the Company’s Form 10-K for the year ended December 31, 2023 and its subsequently filed periodic reports. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the Company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

 

 

 

 

 

 

 

 

 

About Organogenesis Holdings Inc.

Organogenesis Holdings Inc. is a leading regenerative medicine company focused on the development, manufacture, and commercialization of solutions for the advanced wound care and surgical and sports medicine markets. Organogenesis offers a comprehensive portfolio of innovative regenerative products to address patient needs across the continuum of care. For more information, visit www.organogenesis.com.

 

Investor Inquiries:
Westwicke Partners
Mike Piccinino, CFA
OrganoIR@westwicke.com
443-213-0500

 

Press and Media Inquiries:
Organogenesis

communications@organo.com